Sustainability disclosure is netting the global corporate sector,
The corporate segment is just a month away from disclosing its quarterly financial results. Besides the financial analysts who are waiting with a hawk eye to review the company’s performance and forecast its trajectory, another set–of sustainability experts are keen to study the impact of various regulatory disclosures that companies have undertaken and the impact of these regulations.
However, for the business as usual (BaU), commissions and governments are giving out mixed signals. On a positive note, Singapore will introduce mandatory climate-related reporting requirements for listed and large non-listed companies starting in 2025. The rules were announced by the Second Minister for Finance Chee Hong Tat, and details were released by the Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX RegCo). The new reporting obligations will be phased, starting with listed companies in 2025 and large non-listed companies in 2027.
The specific obligations for each group will be phased in over time, with listed companies reporting on Scope 1 and 2 emissions in the first year and large non-listed companies starting in 2029. The government will also focus on helping companies develop sustainability reporting and assurance competencies.
The country already has stringent ESG compliance standards. The new mandate will strengthen its stand in the global Destination Sustainability Index, demonstrating its commitment to real change.
Back home in India, the Securities and Exchange Board of India (SEBI) introduced BRSR in 2021, last year upgraded the compliance to introduce Business Responsibility and Sustainability Reporting (BRSR) Core that includes nine new principles to include the value chain and the customers, as well as third-party assurance.
The framework is set to undergo a significant transformation in 2024, requiring top 1000 companies to ensure reasonable assurance, enhancing transparency, risk management, and regulatory compliance. Analysts have pointed out SEBI’s reduction in the number of listed corporates required to submit BRSR reports from 1000, resulting in a decrease in compliance.
On the other hand, in Europe, the Council and the European Parliament have reached a provisional agreement to delay sustainability reporting for certain sectors and third-country companies by two years. The agreement will allow more time for companies to prepare for the sectorial European Sustainability Reporting Standards (ESRS) and specific standards for large non-EU companies, which will be adopted in June 2026. The agreement aims to boost European competitiveness by reducing the administrative burden on companies and allowing them time to implement the ESRS and prepare for the sectorial European Sustainability Reporting Standards.
The Commission proposed reducing reporting obligations by 25% without undermining related policy objectives, and the provisional agreement now needs to be endorsed and formally adopted by both institutions. The date of application for third-country companies will remain the financial year 2028, as set out in the CSRD.
Sustainability and ESG reporting are now mainstream. Regionally, corporates are abiding by the local rules and therefore, have an ESG strategy in place. For those organizations that have a multi-national presence, compliance gets tougher as they have to comply with multiple regulations.
What is required is a linear compliance mechanism that will enable the multinationals, or domestic companies targeting global expansion to seamlessly adhere to the compliance.
The organizations have come a long way in terms of change of attitude from tick-boxing compliance mandates to impact-driven outcomes. However, not meeting climate action targets remains a concern. For this, we need stricter and faster implementation of regulations.